Soybeans soar on hot, dry outlook

Chicago Board of Trade September soybeans settled up 38 3/4 cents, or 3%, at $13.22 a bushel.

Forecasts call for dry weather in the next seven days in southern and western parts of the Farm Belt, including southern parts of Nebraska, Iowa and Illinois. Hot temperatures are also expected for the next two weeks.

The unfavorable weather comes as soy crops are going through crucial, yield-determining stages of growth, including setting pods and filling them out with beans. Dry conditions during those stages can reduce expected output.

Further fueling worries about crops, participants on the first day of an annual corn and soybean Midwest crop tour reported seeing fields where conditions were not as good as expected, despite being healthy overall. The tour will release official yield estimates as it continues through states from Nebraska to Ohio this week.

"We've been hearing a lot of anecdotal reports about deteriorating crops over the past week. The tour should tell us if those are representative or if those are just isolated incidents," said Arlan Suderman, a senior market analyst with agricultural advisory firm Water Street Solutions.

Soybean futures also benefited from a government report showing officials inspected for export more bushels of soybeans than analysts had expected. Soybean export inspections in the week through Aug. 15 totaled 5.3 million bushels, compared to expectations for 1 million to 3 million, the U.S. Department of Agriculture report showed.

The report highlighted strong export demand for soybeans. Paired with worries about a smaller harvest than expected, signs of strong demand are fueling bullish sentiment among some traders.

"We are looking at a robust export season," Mr. Suderman said.

Corn futures also rallied on worries about unfavorable weather threatening crop development, even though most of the U.S. corn crop has already passed its key growth stage of pollination.

For northwest and central Ohio, one crop tour route averaged a corn yield estimate of 169.4 bushels an acre across eight fields, just short of the USDA's estimate of 172 for the state. That figure is still significantly higher than Ohio's three year average, of 144.12 bushels an acre.

Technical trading also drove gains in corn, leading the grain to rise by a larger percentage than soybeans during the session. Technical traders saw it as a bullish signal that corn futures jumped last week, breaking out of a downward-trending channel where prices had traded for about two months.